The decision to use the carrot or the stick is one people have been making for centuries. It should not be surprising then, that in 2016 employees are still deciding when planning their corporate wellness programs.
While recent court decisions have backed employers’ right to penalize employees who don’t participate, it remains unwise to use only the stick.
Employees can be coerced into joining wellness programs but may become disengaged and unsatisfied if only the stick is offered.
Additionally, the EEOC has shown a willingness to file lawsuits against employers who harshly penalize their employees for not participating in wellness programs.
If your company chooses to dangle the carrot, it is important to note that this is not a cure-all for increasing the participation in and effectiveness of your wellness program.
Healthy rewards need to be carefully designed to fit each organization. There are six main types of incentive programs that employers use today.
Types of Incentive Programs
1. Targeted Incentives
Through targeted incentives, employers offer personalized wellness programs and incentives for each employee. These “targets” are derived from analyzing employees’ health risks, healthcare claims, and other data.
2. Outcome-Based Incentives
Under outcome-based incentive plans, companies link incentives and penalties to health metrics. Employees pay more for health care until they reach certain cholesterol, blood pressure, or body mass index numbers.
3. Progress-Based Incentives
Progress-based incentives provide rewards for employees to take steps to reach ideal levels of cholesterol, blood pressure, or weight. These actions can include beginning a weight-management program or reducing body mass index.
4. Everything-But-The-Kitchen-Sink Incentives
Employees receive incentives for completing various assignments. The more challenging and beneficial the task is the bigger the incentive.
Workers are required to take action to better their health to become eligible to earn rewards or avoid penalties. The action is planned after the employee has completed a risk assessment (like a weight-management program or a preventative screening).
6. Educational/Awareness Incentives
Employers reward workers for finishing activities such as filling out an assessment of their personal health and risk factors or completing a diet and fitness routine.
Strategies for Designing Incentives
There are several strategies that employers can use when designing healthy rewards for their wellness programs to maximize effectiveness.
— Make the process for obtaining rewards fun. Find ways to better the journey to the incentive, and not just the incentive itself.
— Make sure the rewards are desirable and motivate your employees.
— Personalize your rewards to the employees in your company. Make incentives fit the culture of your organization and what your employees value. This personalization is how you ensure rewards motivate.
— Make the rewards a social process. Recognize accomplishments quickly and publicly. Employees need to receive positive recognition.
— Reward employees as quickly as possible. Do not delay gratification, and make employees wait weeks to receive their incentive.
Other Considerations for Healthy Rewards for Your Wellness Program
There are two important considerations to make when designing your wellness program incentives. The first is that, under the ACA, companies can include financial incentives only up to 30 percent of the yearly cost of coverage for an individual employee.
It is also important to consider that incentives are just one aspect of a wellness program. If your program as a whole is poorly built, it does not matter how well your incentives are designed.
Build your incentives based on your wellness program, not the other way around.
Choosing the right healthy rewards for your wellness program can be the difference in its success. Well-structured rewards can increase employee participation and engagement.
When designing your incentives it is important to decide what type of juicy carrot your employees will savor the most.